Cordiant executives in line for pounds 100m

Cordiant, the advertising group, yesterday unveiled a controversial incentive scheme which could see 140 executives sharing more than pounds 100m between them. The news came as the company split itself into two public quoted vehicles, Saatchi & Saatchi and Cordiant Communications Group (CCG).

Cordiant said 140 senior staff, 70 from each agency network, would buy pounds 6m worth of shares between them to "demonstrate their committment to the enterprise". If both networks meet targets based on earnings per share growth over a three year period, executives could share a paper profit of over pounds 100m.

A spokesman for Cordiant defended the scheme, saying it was virtually impossible the targets would be met. "These are Herculean hurdles, and would mean doubling the size of the business," he said.

However, one analyst, who did not want to be named, hit out at the incentives, especially as Cordiant ran into financial difficulties in the early Nineties. "On the face of it, it looks exceptionally generous," he said.

To receive the maximum incentives, both CCG and Saatchi have to report a 25 per cent annual growh in earnings per share for three years. In addition, both agencies have to be number one or two in the top ten league of global advertising networks.

City analysts were disappointed by the pounds 17.1m cost of the demerger, which was pounds 2m over budget. There were also worries that the margin target of 10 per cent had been deferred by a year. Shares, which have been slightly depressed since the demerger was announced earlier this year, added just 1.5p to end at 122p. However, Cordiant said yesterday that was simply a result of new trading agreements with Zenith Media, the media buyer which will be 50:50 owned by Saatchi and CCG after the demerger.

Observers were positive, though, that Bates Worldwide, which will now be part of CCG, would benefit from the demerger by being able to pitch for business which had previously conflicted with Saatchi. One analyst said: "Bates has up until now been conflicted out of ten per cent of the global advertising market through Saatchi having the Procter & Gamble account."

Michael Bungey, chief executive officer of CCG, said yesterday that Bates had already won new business from Cussons which it would not have been able to win if the old structure had remained intact.

But despite healthier prospects for Bates, which has recently lost key clients such as Miller Brewing, analysts said the demerger had put it in play. One said: "The big advertising networks such as WPP and Omnicom are getting to the stage where they need a third global network. Bates is sitting there - the number one in Asia Pacific, saying `please buy me'".

Cordiant yesterday reported a 30 per cent increase in pre-tax profit to pounds 20m for the six months to the end of June. Charlie Scott, chairman, who becomes non-executive chairman of both CCG and Saatchi, said the demerger would boost revenue growth.

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
Sport
sport
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
PROMOTED VIDEO
Life and Style
techCould new invention save millions in healthcare bills?
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Centre Engineer - Linux, Redhat, Solaris, SAN, Puppet

£55000 per annum: Harrington Starr: A financial software vendor at the forefro...

.NET Developer

£600 per day: Harrington Starr: .NET Developer C#, WPF,BLL, MSMQ, SQL, GIT, SQ...

Data Centre Engineer - Linux / Redhat / Solaris / Puppet / SAN

£65000 per annum: Harrington Starr: A financial software vendor at the forefro...

Business Analyst

£250 - £350 per day: Orgtel: Business Analyst, Bristol, Banking, Business Obje...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape